Correlation Between HF Sinclair and Harmony Gold

Can any of the company-specific risk be diversified away by investing in both HF Sinclair and Harmony Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining HF Sinclair and Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HF Sinclair Corp and Harmony Gold Mining, you can compare the effects of market volatilities on HF Sinclair and Harmony Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in HF Sinclair with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF Sinclair and Harmony Gold.

Diversification Opportunities for HF Sinclair and Harmony Gold

-0.21

Correlation Coefficient

HF Sinclair  Harmony Gold

Very good diversification

The 3 months correlation between DINO and Harmony is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding HF Sinclair Corp and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining and HF Sinclair is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on HF Sinclair Corp are associated (or correlated) with Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of HF Sinclair i.e., HF Sinclair and Harmony Gold go up and down completely randomly.

Pair Corralation between HF Sinclair and Harmony Gold

Given the investment horizon of 90 days HF Sinclair Corp is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, HF Sinclair Corp is 1.75 times less risky than Harmony Gold. The stock trades about -0.08 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,033  in Harmony Gold Mining on September 12, 2024 and sell it today you would lose (83.00) from holding Harmony Gold Mining or give up 8.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

HF Sinclair Corp  vs.  Harmony Gold Mining

HF Sinclair Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HF Sinclair Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Harmony Gold Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harmony Gold Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Harmony Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HF Sinclair and Harmony Gold

The main advantage of trading using opposite HF Sinclair and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF Sinclair position performs unexpectedly, Harmony Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Harmony Gold will offset losses from the drop in Harmony Gold's long position.

The idea behind HF Sinclair Corp and Harmony Gold Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..